by Calculated Risk on 12/23/2010 11:58:00 AM
Thursday, December 23, 2010
Comments on November Personal Income and Outlays Report
The BEA released the Personal Income and Outlays report for November this morning.
Personal income increased $42.3 billion, or 0.3 percent ... Personal consumption expenditures (PCE) increased $43.3 billion, or 0.4 percent.The following graph shows real Personal Consumption Expenditures (PCE) through November (2005 dollars). Note that the y-axis doesn't start at zero to better show the change.
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Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in November, compared with an increase of 0.5 percent in October.
![Personal Consumption Expenditures](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1vpTQmBd2DVQGey43ot4OGUyRG461czq45ISUtWwYe2s6fSklGGkCtMmpzTw1boNGzPT6Y4H4hPo5dr28682PS0ZBIsMFwloi7uKHEsyXV2Y58cBEdLBACljAFkpLKjhPAEqW/s320/PCENov2010.jpg)
The quarterly change in PCE is based on the change from the average in one quarter, compared to the average of the preceding quarter.
The two-month method of estimating real PCE growth for Q4 (a fairly accurate method), suggests real PCE growth of 4.3% in Q4! So this looks like a pretty strong quarter for growth in personal consumption. The last time real PCE grew at more than 4% was in 2006.
Also personal income less transfer payments increased again in November. This increased to $9,305 billion (SAAR, 2005 dollars) from $9,282 billion in October. This measure had stalled out over the summer.
![Personal Income less Transfer](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwlXra2RxuuCCu2VxoNjeGG3pIAQoxDV50e2RRGC5MoBfmTncemVw5nzLDN4dCMKGTUvkjOWizYsL_8bS-pTK7PjI4gxNtqgYNzwD7uLtg26UlIMcgqatT7dt83lMMFU52GYCG/s320/PersonalIncomeLessTransferNov2010.jpg)
Some of the increase in spending came from a decline in the personal saving rate, but overall this was a positive report and suggests solid GDP growth in Q4 (3% or higher).